Real Money

Targeted Genetics' Net Loss Widens

The drug company's revenue fell 30% in the fourth quarter.

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On March 31, 2009, Targeted Genetics ( TGEN) reported that its Q4 FY08 net loss widened due to a $7.90 million non-cash goodwill impairment charge. Net loss for the quarter was $10.85 million or $0.54 per share compared to a loss of $5.07 million or $0.26 per share in Q4 FY07.

Revenue plunged 30.4% to $2.24 million from $3.22 million in the prior year's quarter. This decrease reflects research and development and manufacturing revenue earned under the heart failure collaboration with Celladon Corp. and an HIV/AIDS vaccine project in collaboration with Children's Hospital of Philadelphia and Nationwide Children's Hospital.

Research and development costs reduced 20.1% to $3.89 million from $4.87 million due to lower clinical trial costs for the inflammatory arthritis program resulting from the completion of the clinical trial for this program. General and administrative expenses fell 56.7% to $957,000 from $2.21 million, reflecting decreased employee costs as a result of the realignment of the company's product development priorities. Restructuring charges plummeted 73.3% to $357,000 from $1.34 million in Q4 FY07. However, total operating expenses increased 56.0% year-over-year to $13.13 million from $8.42 million, on goodwill impairment charge.

During the quarter under review, TGEN realigned its product development priorities to focus on its ocular and neurological product candidates and its first use of expressed RNAi. In conjunction with this pipeline prioritization, the company has reduced its payroll costs by 25.0% and other costs by 15.0% over Q4 FY07.

For FY08, annual revenue dropped 15.6% to $8.72 million from $10.33 million in FY07. Net loss for the year widened to $20.72 million or $1.04 per share from $16.13 million or $0.98 per share a year ago.